Johannesburg – Ports in Durban, Abidjan in Côte d’Ivoire and Mombasa in Kenya are most likely to emerge as the major hubs in sub-Saharan Africa, according to a new report published by PricewaterhouseCoopers.

It likened them to major facilities such as Rotterdam and Antwerp for Europe, New York and Los Angeles for North America and Singapore and Shanghai for Asia,

The report titled “Strengthening Africa’s Gateways to Trade: An analysis of port development in Sub-Saharan Africa” published on Thursday found that the three ports in South Africa, West Africa and East Africa are likely to become increasingly sophisticated due to their air links, proximity to highway networks and the internet as well as their access to a large hinterland.

Internationally, shipping remains the most important method of trade and they act as gateways for 80% of merchandise trade by volume and 70% by value.

South Africa’s ports outshine the rest of Sub-Saharan Africa’s and Durban is ranked 25th in the world in attractiveness. However, it only achieves 75% of the efficiency expected from a major global hub port.

Four of the eight largest bulk ports in Sub-Saharan African are located in South Africa. Saldanha in the Western Cape and Richards Bay in KwaZulu-Natal are specialist ports handling iron ore and coal respectively. Durban, the largest container port, also handles the third-largest bulk and break-bulk volume. SA’s other port is in Cape Town.

PwC states that ports are important infrastructure in attracting foreign direct investment (FDI) and these inflows were below average since 2016 in the continent’s two largest economies, Nigeria and South Africa, due to a number of factors including weaker commodity and oil prices as well as a drought. However, the audit and advisory firm expects this to improve in 2018.

According to PwC’s analysis, 25% improvement in port performance can increase a country’s Gross Domestic Product (GDP) by 2%.

Africa returns empty containers

Much of the economic trouble the continent faces can be seen through the situation at ports, as a microcosm, with the continent historically exporting raw commodities and importing the beneficiated products.

This has resulted in most African countries having a large imbalance in trade focused on commodity exports and manufactured imports which poses major shipping cost challenges. Sub-Saharan Africa imports are predominantly containerised cargo, while exports are mostly handled as bulk freight.

This trade imbalance which has greatly affected the continent’s economic chances, means that many containers return to ports abroad empty, thereby absorbing valuable port capacity and resulting in higher logistics costs for inbound traffic, according to PwC.

PwC urged African governments to improve port facilities, amidst rising commodity prices as the upgraded infrastructure will enhance the continent’s trade potential to export manufactured, semi-processed or agricultural goods in containers and countries would be able to expand trade in higher value exports.

Superior ports will also allow for higher volumes of intra-African trade, which currently stands at just 16%, a problem that the recently signed protocol towards a Continental Free Trade Area (CFTA) hopes to address.

Transnet investment

Most ports in Sub-Saharan Africa are operated by governments and Transnet, a major state owned enterprise (SOE) in SA that separates the business into the landlord and port operation divisions, under the Transnet National Ports Authority and Transnet Port Terminals respectively.

PwC’s report found that Transnet in 2017 continues to invest heavily in port and freight infrastructure and ploughed almost R1bn in maintenance and acquisition of cranes, tipplers and dredgers in South African ports.

Investments are also being made in the Waterberg region in Mpumalanga to support coal exports and Transnet has also bought 1 319 new locomotives for the general freight and coal business.

HENDRINA - Eyewitness News has learnt that Optimum coal mine is now being taken to court by another mining company in an effort to have the Gupta-owned mine either placed in business rescue or liquidated.

Optimum mine owes service providers over R60 million.

Derko Mining and Exploration has filed court papers in the High Court in Pretoria.

About 2,000 workers downed tools at the Hendrina-based mine in Mpumalanga on Wednesday worried that they wouldn’t receive their salaries.

Derko mining is seeking recourse from the courts to have money paid to them.

Optimum has been given five days to file notice to oppose the matter and if Optimum fails to do this, the case will be enrolled to be heard on 27 February.

Cleaning, transportation and other service providers have not been paid by Optimum.

Workers are hoping to be paid on Friday. However, the National Union of Mineworkers (NUM) has threatened to intensify its protest if the mine fails to pay employees by Friday midnight.

The mine’s COO has told workers, who briefly demonstrated outside the mine on Thursday, that he is not sure if they will be paid on Friday.

“Bank of Baroda delays changing these dollars into rand so that I can get local currencies to pay.”

NUM branch chair Goodwill Mthombeni says the mine should brace itself for a more radical demonstration.

“People are being provoked now following the response by the COO. We believe what will happen tomorrow will be more than what has happened before.”

London – Anglo American has raised the possibility that it could start buying assets in South Africa, the latest sign of how much has changed in two years, when the miner was focused on selling.

“We no longer have any for sale sign,” Norman Mbazima, deputy chair of Anglo American’s South African unit, said in an interview on Monday. “It is possible to invest in South Africa. We have got hope right now.”

After a collapse in commodity prices in 2015, the mining blue-chip talked about selling assets in South Africa, the home of its biggest diamond, iron ore and platinum mines. While the company sold some coal and platinum mines, that policy is now dead. Some of the mines are now cash cows for Anglo as commodity prices reach multi-year highs.

“We like everything that we are in right now,” he said. “If there are opportunities to expand in those, we would.”

The company said any purchases in South Africa would have to be competitive, and deliver the right return on investment. Still, the mood in South African mining is starting to change after Cyril Ramaphosa was elected to head the ruling African National Congress.

In Davos, Ramaphosa said urgent action is needed to resolve the impasse between government and business over South Africa’s mining charter.

Anglo’s commitment to South Africa will win support from its biggest shareholders. Billionaire mining executive Anil Agarwal called the country an integral part of Anglo. South Africa’s Public Investment Corporation, the second-biggest shareholder, has also long argued for the creation of a domestic mining champion.

“We have no intentions of spinning off Anglo Platinum to a localised company,” Mbazima said of the company’s platinum unit.